On the determinants of multinationals' ownership preferences: evidence from Greece and Portugal

The aim of the paper is to examine the determinants of the ownership preferences of manufacturing multinational firms established in Greece and Portugal in the 1990s. Differences between the two countries in terms of relative FDI size, industry and ownership choices are observed. Transaction cost arguments together with bargaining power considerations through their effects on the affiliate's expected profits provide the theoretical basis for the econometric model which uses multinomial logit analysis on Greek and Portuguese data. The estimations contribute to a better understanding of observed differences, showing that firm and industry characteristics interacting with location affect ownership decisions. (C) 2002 Elsevier Science B.V. All rights reserved.